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The Australian Small Business Blog

Monday, June 29, 2009

Hope is Not a Business Strategy

A record $90 million lottery has been announced for this week. Half the nation are buying tickets. Even my normally very sensible wife has asked me to buy a ticket, against my better judgement (although that is not the first time I have felt I have had to acquiesce to such things in the name of harmony at home, and I am sure it won’t be the last).

As someone who regards themselves as having good analytic skills, I find lotteries are an affront to commonsense. The only way they are commercially sustainable is that everyone on average loses. However with the odd ticket in a major jackpot and our annual flutter on the Melbourne Cup this is just a bit of fun for us. It is not our financial strategy. We are not banking on it to pay for our retirement, and our investment in it is petty cash, annually less than a nice night out.

Unfortunately, all too often, a lottery strategy is the one adopted by many business owners. That is something will turn up. One of their ads draw will draw in a whale customer. That their business gets profiled on a family talk show resulting in a huge surge of business. Maybe one time they do get lucky- but what happens next?

In most cases, not much. They blow their luck (like most lottery winners) and are back to where they started, because they were not prepared for it. They may have been depending on the luck, but didn’t expect it to happen.

Samuel Goldwyn once said to someone who commented that he had a lot of luck in his business “I agree and the harder I worked, the luckier I got”

Now that is the kind of luck upon which you can depend.

Luck starts with a vision, but doesn’t finish there. It must be backed with a plan. A vision without a plan is just a dream. How many of those have come true for you lately?

Your strategy is how you bridge the gap from your current state and your ultimate objective. So write out the key things you want to achieve in your business. This might be more profit or just more time off. Next describe your strategies for bridging these gaps. These would include your Marketing Strategy, your Business Structure or your Operations and People Strategy. If there are gaps you can’t bridge seek advice.

3 comments
:

This is very true in the sense that just blindly hoping without any supporting work or plan is very much blind! I thought it was interesting too in the context of your previous blog about "resilience". As small business people we need to be both optimistic enough to keep working towards our goals (despite whatever the media is saying) and pragmatic enough to have solid foundations (plans etc) so that we can handle our success. Thanks for the insights!

More often than not, business owners adopt the easiest route to achieve their goals. Unfortunately the probability of it happening is 1 out of 10. I agree with you a business owner should have a clear picture of his/her current state and the ultimate goal and work out a plan to achieve this.

My vision for myself to make money while on holiday came true because I worked out a plan around it. And now I am reaping the fruits of my labour.